Federal government considering regulatory action to get railways moving more grain: Ritz

Related

CALGARY - Federal Agriculture Minister Gerry Ritz said Monday he is considering all options, including regulatory or legislative fixes, to ease the rail backlog that has left billions of dollars worth of Canadian grain stranded on the prairies.

In a telephone interview from Winnipeg — where he met with agriculture ministers from the Western provinces as well as grain and rail companies — Ritz said the existing grain transport system is broken and called the railways the “weak link” in the supply chain.

While he said he would prefer a market-driven solution to the problem, he said the government will not stand by and watch Western farmers lose money because they can’t get 2013’s record harvest to market.

“You can be assured that we as a government are fixated on the economy and will do and administer anything that may be required to make sure this logistical system is less broken,” Ritz said. “I want to assure Western farmers this government is serious about seeing this resolved sooner rather than later.”

Ritz’s provincial counterparts are lobbying the federal government to take prompt action. Alberta Agriculture Minister Verlyn Olson has said railway companies who fail to meet their grain-shipping commitments should pay financial penalties.

“There is a growing consensus, certainly among the (provincial) governments, that this isn’t going to fix itself on its own just through negotiations,” Olson said on Monday. “There has to be some other steps taken. I think it’s within the power of the federal government to make everybody accountable.”

Olson said the transportation logjam is affecting not only farmers, but shippers of bitumen, coal, lumber, and other products. He said it has become such a serious problem that he believes it’s time for a national discussion about the long-term vision for Canada’s transportation system.

“We’re working so hard to develop and expand markets ... and this is a big limiting factor for us,” Olson said. “If we want to be growing our economy in terms of developing markets and exporting more, do we have the infrastructure in place that will allow us to do that?”

Under the terms of the federal Fair Rail Service Act, which came into effect last year, there is an arbitration process in place for shippers who feel a rail company has failed to meet its obligations. But the process requires a signed service agreement between the two parties — and none of the grain companies have negotiated such a contract.

Lynn Jacobson, an Enchant-area farmer and president of the Alberta Federation of Agriculture, said if negotiated service agreements don’t exist, it’s very difficult to penalize anyone for the current crisis.

“The frustration is with the government, because the government’s the only body that can put some regulations and requirements on the railroads. None of us can do that, period,” Jacobson said.

Some farmers, Jacobson added, are wondering whether the Harper government failed to consider all the implications when it did away with the single-desk Canadian Wheat Board in 2012.

“Some of that stuff the wheat board handled on the logistics side. Well, there’s a big hole now and everybody is just scrambling,” Jacobson said. “Right now, we’re looking and saying maybe there needs to be an authority overall that’s responsible for the transportation of grain.”

Spokespersons for Canada’s two national railways said Monday their companies are stepping up their game to try to address the logistics backlog.

Canadian National Railway said it hopes to return to “more normal” winter performance of 4,000 cars per week once extreme cold temperatures abate, and will have another 500 hopper cars coming on stream soon. Spokesperson Mark Hallman said in an e-mail the company is lining up the required crews and locomotives to have a record 5,500 cars per week at country elevators as early as April.

Canadian Pacific Railway spokesperson Ed Greenberg said his company is working to deploy thousands more cars per week, and is also calling on port elevators to move to 24-hour operations to match the round-the-clock efforts of the railway.

“By working 24/7, the ports will unload more rail cars so we can turn them back into service for grain shippers,” Greenberg said.

Whatever solution is reached, Alberta Wheat Commission policy analyst Erin Gowriluk said it needs to come quickly because Canada’s reputation as an exporter is suffering.

“Recently we had a Japanese vessel that sat in the port at metro Vancouver for three weeks,” Gowriluk said. “The longer this goes on, the more this will impact our reputation to provide the products we say we’re going to provide. This has implications for Canada’s national economic security.”

astephenson@calgaryherald.com

Comments

We encourage all readers to share their views on our articles and blog posts. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, and please keep your comments relevant and respectful. If you encounter a comment that is abusive, click the "X" in the upper right corner of the comment box to report spam or abuse. We are using Facebook commenting. Visit our FAQ page for more information.

Share

Federal government considering regulatory action to get railways moving more grain: Ritz

Almost Done!

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.